The Adaptation
Fund (AF) was established by Parties of the Kyoto Protocol to finance concrete adaptation
projects and programmes in developing countries that are Parties to the Kyoto Protocol. The
Fund is financed mainly through a levy on Certified Emission Reductions issued from projects
developed under the Clean Development
Mechanism (CDM). The Global Environment
Facility (GEF) provides secretariat services to the Fund, and the World Bank serves as its trustee, both on an interim basis. The
Adaptation Fund is the only mechanism at present that allows developing countries to directly
access money for addressing climate change issues.

A major outcome of the tenth meeting of the Adaptation Fund Board, held from 14-16 June in Bonn, was
the approval of four proposals for concrete adaptation projects. The project concepts endorsed had
been submitted by Nicaragua, Pakistan, Senegal and the Solomon Islands, with a total proposed value
of USD 21.8 million.

The four projects approved are: a plan to improve watersheds to better deal with droughts and
floods in Nicaragua; a proposal to tackle sea level rise in the Solomon Islands, an effort to adapt
to climate change in the coastal areas of Senegal, and a proposal to reduce risk and vulnerabilities
from glacier lake outburst floods in the mountains of Pakistan.

Accessing the funds

There are two ways to receive funding and countries can choose whichever option they prefer.
They can either access finances from the AF directly via their own "national
implementing entities" accredited by the board - as is the case with Senegal - or
they can go through multilateral agencies like the UN
Development Programme (UNDP) or the World Bank. The fact that countries can access the
fund's resources directly and without having to go through the multilateral agencies is
an innovative feature evolved by the Board.

In order to use the direct access option, a national organization has to illustrate that it meets the
fiduciary standards set by the Fund, before submitting proposals to and receiving funds from the AF.
The proposal by the Government of Senegal, submitted through Centre de
Suivi Ecologique, is the first one to make use of the direct access option of the AF. The other
three project concepts were submitted through the UNDP, which acts as a Multilateral Implementing
Entity.

Funding will become available following the Board’s next meeting from 14-16 September, when the
preliminary proposals will be re-submitted as full proposals. There is no cap on the funding as yet.

The Adaptation Fund is still small in relation to the amounts required, but it is growing. It has
received EUR 45 million from Spain, EUR 10 million from Germany, and Sweden recently announced a
EUR 10 million donation. Other countries including France, Finland, Japan, Norway and Switzerland
have also promised funding.

The Fund also has its own money from proceeds of the Kyoto Protocol's Clean Development Mechanism
levy, a projected amount of between USD 300 to 400 million up to the end of
2012. Last year, the Board happily accepted the first voluntary contribution of EUR
100 that was raised by a group of German schoolchildren and stressed that all contributions
regardless of size are welcome!

The Board is composed of 16 members and 16 alternate members representing developed and developing
country Parties, formally elected at a session of the CMP on the Adaptation Fund. They serve for a
two-year term, with a maximum of two consecutive terms.